Analysts address disunity in Nigeria’s financial sector
By Zion Rufus
Financial analysts, policy makers, and enthusiastic Nigerians have expressed their distaste over a ‘disturbing’ situation that has so far caused major upheavals in Nigeria’s forex market and thrown the financial sector into crisis of international proportions.
These reactions follow the outburst of Nigeria’s Finance Minister, Zainab Shamsuna Ahmed CON, who claiming obviousness on the proposed Naira redesign had shared that “we were not consulted at the Ministry of Finance by CBN on the planned naira redesigning and cannot comment on it as regards merits or otherwise.”
It should be recalled that in October, backed by President Muhammadu Buhari, Godwin Emefiele, Governor of the Central Bank of Nigeria(CBN), had announced the apex bank’s plan to redesign and circulate new ₦100, ₦200, ₦500, and ₦1,000 notes.
Bertrand Duru, a business enthusiast shared; “It is a bad joke. In a sane clime, these two people would have been made to resign for this exhibition of incompetence. This is the height, and I’m not sure they care about the impact of their funny games and ignorance on our dying economy. Personally, I believe that these two are playing ping-pong with our collective intelligence. They both need to resign and then be thoroughly audited.”
Addressing the viewpoint of certain analysts defending the notion that the ‘CBN does not have any obligation to discuss anything with the finance ministry’, Ndubuisi Ekekwe, a world renowned professor and tech guru addressed in a LinkedIn statement: “Today, our balance of payment will struggle as the Naira bleeds against most global currencies as many people rush to turn their underground Nairas into USD, GBP, Euro, etc. Yes, the action of CBN has crept into the doors of the ministry of finance.”
In his argument, Ekekwe pointed out that monetary policies and banking regulations should not be separated from national financial policies and implementation.
He said: “The main jobs of a central bank are to keep a country’s currency stable (keep inflation low) and boost employment (manage interest rates). It cannot do those things effectively in isolation without the finance ministry which handles the national budget.”
“So, let us condemn the evidential lack of team spirit which made it possible that the Central Bank of Nigeria (CBN) can plan a huge policy playbook to redesign the Naira with no involvement from the Ministry of Finance. CBN can do what it wants but it has an obligation to inform other partner MDAS (ministries, departments and agencies) so that they are prepared and contribute to the success of the policy implementation and execution.”
John Udofa, CEO, Supra Capital Limited submitted that the evident division between the fiscal and monetary may have served as a catalyst for the current economic downturn.
He shared: “The FMF is fully represented on the CBN board, so one wonders how a serious proposal as the redesign of the Naira was not communicated to the Minister by her representatives on the CBN board. The fact that both the fiscal and monetary are not cooperating may be part of the reason for the total collapse of the economy;with hyperinflation, woeful exchange rates, stagflation etc!! I think if there is any need for a meeting, it should be for a thorough interrogation on the woeful performance of the economy , because the ordinary Nigerian is bearing the brunt of this very poor performance of the economy. The last time I checked, the Naira was trading N830/$1.”
Francis Ogaju, a global business advisor hinted that “Maybe the guys at the finance ministry are also part of those the CBN wanted to cut to size..”
Stating further he said: “And you are expecting the CBN governor to work with the finance minister, that makes it counterproductive then. There is a glaring capability issue in every facet of this government, you can as well call it a bunch of misfits. From the Attorney General to CBN Governor to Finance Minister, which of these three even inspire? Then add Buhari at the top, you now get the memo.”
On his part, Mazi Udoka Uzurumba expects that the Finance Minister needs to resign for ‘making inflammatory comments and clearly showing that she’s ignorant of the workings of the CBN.”
“Yes, there has to be alignment between the monetary, fiscal policies as well as the budget towards achieving economic growth, reducing unemployment, reducing inflation etc. which is why the ministry of finance by virtue of the provision of the Central Bank of Nigeria (CBN) Act 2007 (as amended) has Mr Aliyu Ahmed, a Permanent Secretary on the board of CBN (Non Executive Director). Also the Accountant General of the Federation reports to the Minister of Finance and is on the board of the CBN (Non Executive Director). So if the minister is claiming not to be aware, then maybe she wants the CBN Governor to start reporting to her.”
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